Bankruptcy

If you’re struggling with debt and considering bankruptcy, the biggest question in your mind is probably “Which bankruptcy lawyer should I go to?” It’s one of the most important decisions to make – filing bankruptcy will have a significant impact on your life. Bankruptcy law is very complex, with many twists and turns, and traps for the unwary. If you need to file bankruptcy, choosing the right lawyer is critical.

The simple truth is that a more experienced attorney will do a better job, which means getting you the most benefit from filing and avoiding the mistakes that someone less experienced is bound to make.

This year, we’ve seen more older Dallas-area residents filing for bankruptcy, which unfortunately, isn’t surprising. According to national study, more American seniors (over the age of 65) are filing for bankruptcy than ever before.

The cost of living continues to increase for everyone, and for many older Americans, combined with rising healthcare costs and increasing debt, bankruptcy becomes the only option.

According to the study, the average debt for families with a head of household over the age of 75 has increased drastically since 2010, when it was only $30,288. In 2016, the average debt for the same families was $36,757.

Even more shocking, the number of families 75 and older with debt increased a staggering 60% from 2010 to 2016.

The average Social Security check is only $1,404 a month, and according to government data, that check accounts for more than 90% of the monthly income for over 40% of single seniors.

If you’re a DFW area senior and you’re struggling with debt, or your monthly expenses always exceed your monthly income, we can help! Call us today at 214-760-7777 for a free consultation. We’ll walk you through your options, so you’ll feel confident that you’re making the right step to move forward.

While most of our potential clients ask about what’s involved in a bankruptcy case, and what they need to do when they’re filing, many forget to ask what NOT to do… And the things you shouldn’t do before filing are just as important as what comes afterwards.

In fact, there are certain things you could do before your bankruptcy case that could cause major complications – and could possibly even cause your case to be denied!

As we always say, the most important thing to do when considering bankruptcy is to meet with an experienced bankruptcy lawyer. The advice and guidance you’ll receive are vital to avoiding bumps in the road during your case.

So, for anyone out there who’s considering bankruptcy and hasn’t talked to an experienced attorney yet, here are 5 important things you should avoid doing before you file for bankruptcy:

1. Don’t max our your credit cards (or get new ones)

This seems like common sense, but you’d be surprised at how many people rush out and run up thousands of dollars of additional debt once they know they’re going to file for bankruptcy. Actually, this is fraud, plain and simple. It’s highly likely that any large charges that occur right before your bankruptcy case is filed will result in objections from creditors. If your creditors see enough large charges, they will likely claim that you committed fraud – and that’s definitely a road you don’t want to head down.

2. Don’t pay off certain creditors

Don’t make the mistake of choosing a few creditors to pay off before your case. When you do this, you’re creating preferential payments. The trustee of your bankruptcy case will likely sue the paid off creditor to collect the money that you paid, so the money can be pro-rated to all of your creditors.

3. Don’t ignore debt collection attempts

Sure, the constant calls and letters can be incredibly annoying and stressful, but you shouldn’t flat out ignore the collection attempts. Filing for bankruptcy will stop those collection attempts immediately – but in most cases, if you ignore collection attempts for an extended period of time, the creditors will file lawsuits to try to get their money. These suits could cause complications when you’re trying to recover after your bankruptcy case is completed.

4. Don’t transfer assets to friends or family

Some people think that selling assets to get cash is better than liquidation – but that’s fraud. Others think that transferring property to friends or family members is a better way to protect the property from liquidation. Guess what? That’s fraud too.

5. Don’t pay family members

Just like we mentioned in tip number 2, you can’t play favorites when you’re paying off your debts. This is especially true if you’re ignoring other creditors to pay off family debts. Your trustee has the right to sue your family member to get the payment back for redistribution – and no one wants that.

It’s a question we hear all the time – after a client files their bankruptcy case, they ask us “Should I keep my car?”

Many times, if you’re filing for bankruptcy, you’ve been struggling with debt for quite a while, so it’s likely that you were behind on car payments. Now that the bankruptcy case is filed, you’re wondering if keeping the car is a good choice to make.

In most cases, your car is an absolute necessity – you’ve got to use it to get to work, or to handle everyday errands. In some cases though, the amount owed on your auto loan might not make sense after your bankruptcy case.

You’ve just filed your bankruptcy case, and now you’re on pins and needles. You’ve gotten all the paperwork together, answered all our “lawyer questions”, and filed all your schedules with the court. What happens now?

Actually – not much… Most of the work has already been done at this point.

It’s important to stay engaged, though. You don’t want to hand everything to your attorney and then go silent.

We get the “what next?” question all the time, so we thought we’d put together this list of 5 things to do AFTER you’ve filed your bankruptcy case.

1. Ask us questions

If you don’t understand something, let us know! Let us know you’re confused and we’ll take the time to explain things.

2. Open all your mail

Most of our clients are tired of collection notices, so they’re not quick to open their mail. Make sure you’re opening everything so you’ll see anything we send to you. We’ll send you a copy of everything so you know what’s going on and what we’re doing for you.

3. Respond quickly

If we ask you for information or any documents, don’t make us wait. Bankruptcy cases typically move pretty quickly, so we don’t want a delay to complicate your case.

4. Keep us posted

Major life events can affect a bankruptcy case. If you’ve changed jobs, lost your job, had a major accident, or moved, you need to let us know.

5. Don’t worry!

Bankruptcy is confusing and scary – but our staff does this all the time. We have years of experience with bankruptcy cases, and most cases have no unexpected complications.

We’re always here to help! If you’ve got questions or concerns, or you just need something explained, give us a call and we’ll explain whatever you need.

Debt is pretty much a fact of life for most Americans. Most families don’t teach their children how to responsibly manage money, which leads to problems down the road. The majority of today’s workforce has learned money management through trial and lots of error.

It’s far too easy to get overextended on your finances, and most people don’t realize that they’re in trouble until it’s almost too late. When you’re already stretching your finances to the limit, any unexpected bump can send you down the road to bankruptcy.

If you’re wondering if you’re overextended or starting to struggle with debt, the following signs show you’re in danger:

You don’t have any savings, or you have to pull from your savings every month for expenses

Other than your car payment and mortgage, you couldn’t pay off 100% of your debt within 1 year

You don’t actually know how much you owe

You use new credit cards to pay off old credit cards or loans

You use credit cards for everyday expenses

You always pay only the minimum due on your credit cards

You’ve paid your credit cards late, or skipped payments

More than 20% of your actual take-home pay goes towards debt

You don’t have to be behind – if you’ve got credit card balances that never seem to get paid down because you’re always making new charges, that’s a dangerous situation. A sudden accident with big medical bills or even the loss of your job would send you spinning out of control.

If you said yes to any of the items above and think you might be overextended, you should take immediate steps to get your financial situation under control. If you can regain control and stay on a healthy path, you’ll be able to avoid filing for bankruptcy.

Here’s how to get your finances on track:

Figure out exactly what you owe. It can be scary to sit down and look at the big picture, but you need to know the exact number. Once you know exactly what you owe, you’ll be able to make a plan.

Look at your total take-home pay for a single month. This is the most important number, because you have to create a plan where you’ve got more coming in than what you’re spending.

Create a detailed budget. Figure out what you have to spend for the essentials – shelter, utilities, food, and transportation. Don’t count your credit cards or any other expenses here – you need to set your number for necessary expenses so you know what’s left over each month.

Take the money that’s left over and start applying it to your debts. Pay the minimum amount due on every debt except one, and push as much as you can afford towards that balance. Once you’ve paid off that debt, move on to the next. If you make a solid, realistic plan for paying off your debts, it’s much easier to stick to your budget and be responsible with your money.

Once you’ve paid off most of your debt, start saving. Build up your savings in case an unexpected event comes up – you don’t want to have to start all over!

Most importantly – stick to your budget even after you’ve paid off your credit cards. If you stick to your budget and plan ahead for big purchases, you’ll find that it’s easy to stay on top of your finances and avoid debt altogether.

Most of our clients come to us, struggling with massive debts that have spun out of control. We’ve shared lots of tips in the past for avoiding debt, but it’s also important to get advice from a financial advisor or bankruptcy attorney before you decide to file.

According to John Rao, a bankruptcy attorney with a Boston-based consumer advocacy group, you should “first explore opportunities to resolve problems outside of bankruptcy. Bankruptcy isn’t going to help everyone.”

Typically, you’ll want to consider bankruptcy if:

Most of your debt is “unsecured” (such as credit card bills or medical bills)

You’re hounded by calls from collection agencies at home and at work

You’ve had wages garnished or your bank account frozen after a judgement

We’ve helped many hundreds of Dallas-area residents with their bankruptcy cases over the years, and the most common question we hear first is “Should I file bankruptcy?”

When you’re drowning in uncontrollable debt, you’re stressed and scared – and bankruptcy seems like a huge step to take. That’s why we offer free consultations… we want to help explain every step of the process and all possible outcomes, so you’ll be able to make the right decision for your situation.

Let’s look at the advantages and disadvantages of bankruptcy and ways to decide when bankruptcy might be the right decision for you.

What exactly is bankrtupcy?

The federal government established bankruptcy laws to allow individuals and businesses a way to get relief from debts that they’re unable to pay back, in order to get a fresh start. The laws were created so that honest people who had unfortunate circumstances could get a clean slate and start over. (more…)

It’s tax season again, which means we’re hearing lots of questions from potential clients about the tax implications of filing for bankruptcy. It’s a fairly simple answer – it depends on whether the debt was discharged in bankruptcy or just forgiven by the creditor.

Tax implications of debts discharged in bankruptcy

If your debt is discharged as part of your bankruptcy case, there are no income tax consequences. Since the debt is excluded from your gross income, you don’t have to worry about anything with the IRS.

Many times, you’ll receive a 1099-C form , which is for debt that’s been canceled or forgiven. If your receive one, you’ll just need to file Form 982 with your taxes, which lets the IRS know that the debt was in fact discharged in your bankruptcy case.

What about debts cancelled outside of bankruptcy?

If you’ve borrowed from a commercial lender and that lender later forgives or cancels your debt, you’ll most likely have to include the canceled amount as income when you file your taxes. Typically, loan proceeds don’t count as income because you’re obligated to pay back the loan. Once the loan is canceled or forgiven, that makes the loan count as income.

If you’re in this situation, your lender will send out Form 1099-C, “Cancelation of debt to the debtor.” They’re required to send this form by the 31st of January of the year following the year when your debt was canceled.

The unpaid portion of your loan will be reported as income, unless:

You are insolvent when the debt is canceled.

You operate a farm and the debt results from your farm, more than half of your income from the last 3 years was from farming, and the loan was owed to an agency regularly engaged in lending.

It’s a non-recourse loan

It’s excepted by the Mortgage Debt Relief Act of 2007

If you’re in a rough financial spot and you’re considering bankruptcy – but wondering about the tax implications – call us today at 214-760-7777 and schedule a free consultation. We’ll walk you through the various parts of bankruptcy so you fully understand how things will work.

It’s always great to hear from happy clients… Bad things can happen to good people, and we love to help hard working Dallas area residents get a fresh start. Here’s an awesome review left recently by Mr. Shaw:

Mr. Rubin was at the 341 meeting with me in Plano. Sitting there nervously waiting, I was relieved to see Mr. Rubin walk in. This process is new to me. I was very apprehensive and a bit depressed in the first meeting with Mr. Rubin. I felt ashamed and feeling I had failed in my responsibilities. I left the meeting feeling a bit better with the confidence and knowledge that Mr. Rubin showed.

The entire staff I have been involved with at your offices have all been very pleasant, helpful and respectful, and left me feeling much more comfortable about this whole process.

After leaving the meeting yesterday with Mr. Rubin in the Chapter 13 Bankruptcy Office, I wanted him to know how much I appreciate his efforts and his work. Being represented by someone so comfortable in his abilities and knowledge has put me and my family at ease and confident that we have done the right thing and the future looks much better.

In my work as a Commercial Pilot, I strive to be as knowledgeable, proficient and confident in my flying as I can be, so that my passengers are relaxed and comfortable and safe on their flight. I take that responsibility very seriously. Its a good feeling at the end of a difficult flight to see their appreciation. Not unlike what Mr. Rubin has done for me. I can see that he takes his job and responsibilities very seriously as well.

Please tell him and his staff, thank you, for me and my family. We are very grateful.